The Supreme Court yesterday rejected a retired Navy welder's efforts to obtain disability benefits he lost after relying on erroneous advice from the federal government.
The 7 to 2 ruling came in the case of Charles Richmond, who was denied disability benefits in 1986 after a Navy employment relations specialist gave him an outdated publication and wrong information.
Relying on the specialist, Richmond took on extra work that pushed his earnings over the eligibility ceiling. As a result he lost benefits for six months.
The court said the government cannot be ordered to pay money unless it is authorized to do so by statute and in this case the statute prohibits payment if an individual earns too much money.
The Court of Appeals for the Federal Circuit here had ordered the $4,000 in lost benefits restored, ruling that because the government gave Richmond the wrong advice, it could not enforce the eligibility ceiling against him, citing the legal doctrine of "equitable estoppel."
The doctrine is designed to promote fairness. Essentially it prohibits those who have engaged in certain conduct -- in this case, providing incorrect information -- from escaping their normal obligations -- paying benefits -- because the person who acted incorrectly relied on their advice.
In reversing the appeals court ruling, the court, in an opinion by Justice Anthony M. Kennedy, said "equitable estoppel" cannot be used to force the federal government to pay money that has not been appropriated by law.
Kennedy said such assessments were barred by a clause in the Constitution that states "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law."
"To open the door to estoppel claims would only invite endless litigation over both real and imagined claims of misinformation by disgruntled citizens, imposing an unpredictable drain" on the Treasury, he said.
"The natural consequence of a rule that made the government liable for the statements of its agents would be a decision to cut back and impose strict controls upon government provision of information in order to limit liability . . . . " Kennedy added. "The inevitable fact of occasional individual hardship cannot undermine the interest of the citizenry as a whole in the ready availability of government information."
In a dissenting opinion, Justice Thurgood Marshall, joined by Justice William J. Brennan Jr., disputed Kennedy's assertion that the payment would violate the Constitution. Instead, Marshall said, "Richmond's collection of disability benefits would be fully consistent with the relevant appropriation."
The Bush administration had hoped to use the case, Office of Personnel Management v. Richmond, to conclusively establish a proposition the court has repeatedly ducked: that the government may never be equitably estopped, even in cases that do not involve monetary payments. In an indication of the significance of the issue, Solicitor General Kenneth W. Starr argued the case himself.
Kennedy said there is strong evidence "that our approach to these cases has provided inadequate guidance for the federal courts and served only to invite and prolong needless litigation." But he declined to adopt such a "sweeping rule." He said the court would leave that issue "for another day."